EDMONTON — The Alberta Utilities Commission has dismissed TransAlta’s complaint it has been unfairly treated by the electricity market watchdog, and has set a date to hear market manipulation charges against the utility.

The commission ruled the complaints filed against the Market Surveillance Administrator by TransAlta and two of its traders must be dismissed because they are related to the allegations against the utility.

But it states in its ruling that TransAlta and traders Nathan Kaiser and Scott Connelly can still raise the complaints in a hearing into the market manipulation allegations Aug. 5 at the commission’s downtown Calgary office.

The ruling is based on a section of the Alberta Utilities Commission Act that requires related matters to be heard together rather than on the merits of TransAlta’s complaints against the MSA, commission spokesman Jim Law said Friday.

“The commission found the dismissal of the complaints will not deprive TransAlta or the individuals of a fair opportunity to pursue the issues they raised in their complaints with respect to the conduct of the MSA, to the extent those issues amount to defences or mitigating factors,” Law said.

TransAlta and the two employees are accused of violating the Electric Utilities Act and the Fair, Efficient and Open Competition Regulation by driving up electricity prices though discretionary shutdowns of coal-fired power plants during peak demand periods in late 2010 and early 2011.

“The substance of the matter that the MSA has brought before us is the allegation that the discretionary outages and forward trading the MSA describes amounts to anti-competitive conduct that undermined the integrity of the Alberta wholesale electric energy market,” said Law.

Alberta has the only fully deregulated electricity market in Canada.

TransAlta said in a statement Friday the Alberta Utilities Commission was clear that it made the decision based on its interpretation of the act and that it is not an assessment of the merits of its complaint against the MSA.

“TransAlta’s position has not changed, and we look forward to having our side of this dispute heard in an AUC hearing,” spokeswoman Stacey Hatcher said in the news release. “We reiterate that we stand behind our employees, their decisions and actions, and we will rigorously defend TransAlta’s conduct in the marketplace.”

The Calgary-based power producer and transmission company has argued the rules regarding discretionary shutdowns were not clear and that it did nothing wrong.

In the complaint filed against the MSA in February as the watchdog was filing its allegations, TransAlta called the investigation “haphazard and contradictory.” It claimed the watchdog initially portrayed the conduct as “onside” before eventually calling it “completely offside.”

“The MSA failed to realize that as a market watchdog, it has a duty to be fair and forthright,” TransAlta stated in the complaint it initially sought to keep confidential.

MSA president Harry Chandler said he is pleased all three complaints against the MSA have been dismissed and the matter will go to a hearing without delay.

“It is in everyone’s interest to have the facts put before the commission so they can be tested in the rigorous way the AUC conducts its proceedings,” he said. “The case is about a market participant and its traders being held to account for opportunistic behaviour that undermined competition — not about a lack of clarity in the market rules or a failure of the market.”

If the price manipulation allegations are upheld by the AUC, the MSA is seeking to have TransAlta fined and forced to pay millions of dollars in damages. It is also seeking to have Kaiser and Connelly, who has since left TransAlta, suspended from trading for three years.

Last year, Connelly was fined $15 million for allegedly manipulating electricity prices in the United States. He and his employer, Barclays Bank PLC, are appealing the civil penalty imposed by the U.S. Federal Energy Regulating Commission.

TransAlta was previously fined $370,000 for breaking market rules in November 2010 by restricting electricity imports 31 times over eight days to create an artificial shortage and increase power prices. The fine, which stemmed from a negotiated settlement, drew protests from critics who said a $5-million penalty would be more appropriate.

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